ECB: Draghi Holds Steady and Bats Off Criticism - ANZ

Research Team at ANZ, notes that the ECB left policy unchanged
overnight, with Draghi reiterating in his introductory remarks that the
Governing Council “if warranted to achieve its objective, will act by
using all the instruments available within its mandate” and that
interest rates will be at “present or lower levels for an extended
period of time”.

Key Quotes

“The
retention of a clear easing bias was expected, although it admittedly
still didn’t stop the euro from initially rallying sharply post
decision, perhaps as Draghi signalled that while he is prepared to do
more, he isn’t in a lot of hurry to act. He also didn’t attempt to talk
down the euro as aggressively as perhaps some had been thinking he might
have done ahead of the decision (the euro later fell back sharply,
although the driver of that was less clear and broader than just a euro
movement).

Draghi spent some time batting away or responding to
criticism of the ECB’s previous actions. Draghi emphasised that the
March measures need to be given time to work and that financial
conditions had eased since March and were supporting the recovery. And
with regard to specific criticism from Germany, Draghi stated “We have a
mandate to pursue price stability for the whole of the Eurozone, not
just Germany…This mandate is established by the treaty, by the law. We
obey the law, not the politicians, because we are independent as stated
by law”.”